Anglo American slashes dividend as annual profits sink

(Sharecast News) - Mining group Anglo American has slashed its annual dividend by a half after seeing profits plunge in 2023 on the back of impairments and downturns in the platinum and diamond markets. Anglo said it is now planning on cutting annual run rate costs by $1bn and capital spend by $1.6bn over the next three years, while also cutting out unprofitable volumes, as it streamlines in the face of high cost pressures.

The company reported underlying EBITDA for 2023 of $9.96bn, down 31% on the previous year, as 2% production growth was outweighed by a drop in the mining EBITDA margin - from 47% to 39% - along with a 13% lower product basket price and a 4% unit cost increase.

Anglo also registered a $1.6bn write-down of the book value of diamond business De Beers, mainly related to goodwill, due to its updated assessment of global GDP growth and consumer demand.

The company also booked a $0.8bn impairment for its nickel business Barro Alto in 2023 following revisions to the pricing outlook and the long-term cost profile of the asset.

Profit attributable to equity shareholders slumped to just $283m, from $4.51bn in 2022, while revenues fell 13% to $30.65bn.

"2023 saw us increase production by 2% and contain the effect of high inflation on our costs, while facing a cyclical downturn in PGMs and diamonds," said chief executive Duncan Wanblad.

The company declared a final dividend of 41 cents per share, down 45% year-on-year, resulting in a total dividend of 96 cents. down from 198 cents.

"There is no doubt that while the immediate macro picture presents some challenges for our PGMs and diamonds businesses, the demand trends for metals and minerals have rarely looked better," Wanblad said. "We are focused on reducing complexities and continue to manage our assets, capital and portfolio dynamically and for value."